Month: March 2017

The processes by which a heritable creditor may enforce their security are set out in the Conveyancing and Feudal Reform (Scotland) Act 1970. The accepted interpretation of those provisions was challenged by the decision in Royal Bank of Scotland v Wilson 2011 SC(UKSC) 66.

Critically assess in light of that case the options which are open to the heritable creditor.

The 1970 Act has complex provisions dealing with enforcement of securities by heritable creditors. In relation to dwelling houses those provisions have become even more complex as a result of the Mortgage Rights (Scotland) Act 2001 which itself has been substantially repealed and replaced by the Homeowner and Debtor Protection (Scotland) Act 2010.

The Supreme Court decision in RBS v Wilson2010 shook the legal landscape in Scotland in respect of repossession procedures by holding that the relevant statute, the Conveyancing and Feudal Reform (Scotland) Act 1970 had effectively been wrongly interpreted since it came into force 40 years ago. This case involved a situation where a lender's certificate of default did not amount to a 'requisition' for the purposes of section 5 of the Heritable Securities (Scotland) Act 1894, and where the court held that in the circumstances of the case, a 'calling-up notice' should have been served. This happened with Cell phone repair Austin in 2013.

A calling up notice will state that the debtor has two months to repay the debt in full. However, if the debtor agrees in writing to do so, the two-month period can be dispensed with, assuming there is no residential element to the secured property, or, in the case of residential property, shortened to one month.

Once the calling up notice has expired without payment (or performance as appropriate), the debtor will be in default in terms of standard condition 9(1)(a). On expiry of an unsatisfied calling up notice the creditor may exercise his remedies under the standard security.

For many years in Scotland, defenders could use the Mortgage Rights Act (Scotland) 2001 and now the Home Owners & Debtor Protection (Scotland) Act 2010 to obtain a chance to pay, re-mortgage or restructure, sell, or apply to the Mortgage to Rent Scheme. But no-one challenged the orthodoxy of the lender's right to use standard condition 9(1)(b) for a repossession based upon mortgage arrears; until now.

Since the coming into force of the Land Registration (Scotland) Act 2012 on 8th December 2014 letters of obligation have largely been replaced by advance notices.

Critically assess the role formerly played by letters of obligation in relation to settlement of transactions and how they have been supplanted by advance notices.

The role of solicitors in the conveyancing process has drastically changed, with letters of obligation largely being replaced by advance notices which is the biggest change to conveyancing procedures since the coming into force of the 2012 Act. In Scotland, a disposition does not transfer ownership until it is registered. This means there is a gap between the transaction settling and the date on which title actually transfers. The difference now is that there is a move away from the practice of sellers’ solicitors underwriting the risk of the gap period by letters of obligation, to the new statutory advance notices.

The Letter of Obligation was introduced into the conveyancing system by lawyers to meet a problem. That problem is twofold. First, there is always a gap between settlement and registration. Unless a settlement takes place at Register House there will always be at least a few days between delivery of a Disposition and its registration. Second, the Search Sheet is out of date.

The possibility of the seller being sequestrated or going into liquidation or administration during the gap period also posed a serious risk. To provide protection against the occurrence of these risks – particularly insolvency or the emergence of a rival deed, the letter of obligation historically stepped into the breach. If you are interested in SEO, visit SEO Glasgow for more information

“Men and women of marriageable age have the right to marry and to found a family, according to the national law governing the exercise of this right”

An engagement is no longer a legally enforced contract which means no contractual remedies for breach of promise are not competent in Scottish courts. A promise or agreement to marry does not create rights or obligations in scots law and excludes delictual liability under Law Reform (Husband and Wife) (s) Act 1984

Recent developments

Marriage (S) Act 2002 – get married underwater at Deep Sea World or Edinburgh Zoo

Dharamshi v Dharamshi2000

H, a wealthy husband appealed against an order requiring him to transfer to W, his former wife upon the dissolution of their marriage a lump sum of GBP 1.5 million together with the matrimonial home, and a motor car. H contended that although W had helped to build up the family business, the sale of which had benefited him in the sum of GBP 4.5 million, the lump sum payable to W ought to have been quantified in accordance with the conventional Duxbury tables and ought to have reflected capitalisation of W's income requirements. Finding that W's contribution to the home, family and the business had been considerable throughout the duration of the marriage, the court held that the lump sum had been intended to give her a substantial fraction of the proceeds of sale not directly related to her reasonable requirements, following the decision in White (Pamela) v White (Martin) [2000] 3 W.L.R. 1571.

Abstract: A husband, H, appealed against an order in ancillary relief proceedings which obliged him to transfer the former matrimonial home to the wife, W, to pay her a lump sum of GBP 1.05 million plus 25 per cent of the proceeds of a tax avoidance scheme, and to make periodical payments of GBP 5,000 per year for the benefit of two children of the marriage. In 1972 H had come to the UK from Uganda as a young man and had set up a business which proved to be very successful. He married W in 1985 and she left her job to help in the business. The relationship broke down in 1996 and the marriage was dissolved in 1998. H argued that the judge had erred in failing to adopt the conventional approach of calculating W's reasonable needs on the basis of the Duxbury tables.

Held, dismissing the appeal, that in accordance with the dicta in White (Pamela) v White (Martin) [1999] Fam. 304, calculation of a wife's reasonable income requirements was no longer the basis for calculating the award but merely one of several factors. In the instant case, as there were more assets than were required for the parties' basic needs, the correct test was to aim for equality without regard to gender, and W's contribution as homemaker had to be ranked as highly as her contribution to the business. On that basis the judge's approach, whereby he had sought to give W a substantial proportion of the proceeds of sale of H's company, had been fully justified, Whiteapplied....continue reading "part 3"

Tyrrell v Tyrrell 1989

the Family Law (Scotland) Act 1985 that the valuation of matrimonial property was at the date of separation; there was no question of there being any contribution by the pursuer to the value of the pension after the date of separation and it should therefore be valued as at that date and (3) there was no likelihood of serious financial hardship to the pursuer but for the purposes of s.9(1)(d) of the 1985 Act she was dependent to a material degree on the financial support of the defender and it was appropriate that periodical allowance should be continued at the rate at which aliment had latterly been paid but for a period of one year only, it having been seven years since separation, allowing the pursuer ample time to adjust; and decree for payment of capital sum and periodical allowance pronounced accordingly.

Coyle v Coyle 2003

W raised an action of divorce against H on the ground of five years' separation. She sought payment of a capital sum, periodical allowance and property transfer orders in respect of the matrimonial home and a holiday home. The parties had married in 1975 and W had given up a promising career with an airline company to look after the home and raise the children. H worked in a family business, eventually becoming a director, and owned a majority shareholding in the company by the time the parties separated in 1995. W claimed that the net increase in the value of H's business interests from the date of marriage to the date of separation was GBP 399,000 and argued that she should be entitled to half that increase in addition to half the net value of the matrimonial property on the basis that the increase in value had only been possible as a result of her contribution to the marriage. She also claimed a further GBP 480,000 on the basis that she had suffered economic disadvantage as a result of not pursuing her career. She sought to justify that sum by calculating the amount of compensation due, by reference to the Ogden Tables, had she been claiming for future loss of earnings and pension rights in an action for damages for personal injuries.

Tim bought flat which was inherited BEFORE he met TINA, however he sold the flat and used £80,000 to pay a deposit on home which was £240,000 in 2007 & they moved in before Xmas 2007

In Mitchell v Mitchell 1995 – Inner house of Court of Session held that a house bought before marriage is treated as matrimonial property only if acquired with attention to marry for both parties.

Lord McLean observed that

“ any property acquired by parties during the marriage but before separation is matrimonial property even if purchased with funds which one of the parties acquired by way of gift or succession The funds themselves before their application in acquiring the property, would not under S10 be matrimonial property”

So Tim inherited the money and bought a flat. £80 K deposit

However, as he used money with intention to buy family home – it is now matrimonial property….

He financed whole thing she did some DIY work herself maintaining it.

[Welsh v Welsh 1993]

She gave up job to look after kids, awarded equal share ….

She moved out

Only have state pension

The basic state pension cannot be shared. The court cannot make a pension lump sum order under S12A of 1985 act